Megatrends

The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.

Convenience Stores in Bulgaria

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Executive Summary

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PROSPECTS

Contraction of core consumer base

Convenience stores saw ongoing decline at the end of the review period as it continued to suffer from the contraction of its core consumer base, which consists primarily of inhabitants of rural areas. Two types of convenience store operators dominate the channel in Bulgaria - large, loosely organised chains and small establishments present in just a few towns and villages.

Intense competition in urban environment

The impact of urbanisation and emigration on rural communities is placing growing pressure on convenience store operators to build their presence in urban areas. However, these players face intense competition in the urban environment.

Unpromising demographic outlook

Bulgaria’s shifting demographic profile presents an unpromising picture in terms of the development of the convenience stores channel. While the overall population is contracting, decline is set to be most marked in the young adult population, aged 18 to 29 years-old, over the forecast period.

COMPETITIVE LANDSCAPE

Challenging environment

Bulgaria has provided a challenging environment for convenience stores players in recent years, with the struggles of smaller operators underlined by the marked fall in value share experienced by companies outside the top nine in 2018. However, it is not only smaller players who have struggled to cope with the difficulties of developing convenience stores, with the problems besetting Piccadilly Express contributing to the broader Piccadilly chain being declared insolvent in 2017.

Some players seeing growth

Some convenience stores players are faring better than others, however. Paconi, a chain based in and around the north-eastern city of Ruse (population around 150,000), witnessed particularly significant growth in 2018 as it continued to expand its store network and targeted the area’s high number of price-sensitive consumers with promotional activity.

Independents reluctant to enter chains

As it stands, independent small grocers represent a significant competitive obstacle to convenience stores, as they are widely distributed and well-established in urban areas that are typically key centres of convenience store development. This issue is exacerbated by the fact that the convenience stores channel has as yet failed to turn the presence of independent small grocers to its advantage by bringing them into chains.

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